Nowadays there seems to be a lot of confusion regarding business processes since the term is widely used and heard, but many are not well aware of what it is. In this article, we provide all the necessary information about what business processes are and why your company needs them.
What is a Business Process?
Business processes refer to interrelated activities which have a specific sequence and are performed by people or teams to achieve a specific goal (product/service) for a particular user or consumer. Business processes are implemented to achieve a predetermined organizational objective and occur at all levels of the organization. Also, they are the basis for the development of related concepts such as Business Process Management (BPM) and Robotic Process Automation (RPA), among others.
Business Processes, Procedures, and Functions.
While a business process is a series of related tasks that generate the desired result, a procedure is a clear and stipulated way of performing tasks within a business process. The procedure details, among other things, the teams and the people responsible for each part of the process as well as the specifications for each part.
A business function is an organizational unit of the company with a specific set of activities that help companies carry out their general objectives and processes.
The Importance of Business Processes
The need and advantages of having business processes are evident given that through these, we achieve our organization’s goals. By identifying and highlighting the most important processes, we ensure:
- Efficient production and delivery of the value proposition.
- Improvement of processes and optimization of individual activities such as the use of resources.
- Costs reduction.
- Identification of the main processes that contribute to the achievement of business objectives.
- Streamline communication between people, functions, and departments.
- Establishment of approval levels, control on the level of responsibility, and optimal use of resources.
- Prevention of chaos in your daily operations.
- Standardization of procedures that complete important tasks.
Essential Attributes of an Ideal Business Process
A good business process has 4 characteristics that identify it:
- It is clearly defined: A business process must have a well-defined start and endpoint. Between both points, there is a finite number of coordinated and interdependent steps.
- It is repeatable: When executed indefinitely, a business process must generate consistent results over and over again.
- It creates value: The ultimate goal of each activity and each task in the process must be the creation of value. Any step in the process that does not add value must be eliminated.
- It is flexible: The nature of a business process is its flexibility to change. This is because when any improvement is identified, the process must allow such change to be made without affecting the different stakeholders.
Categories of Business Processes
Depending on the industry, the way of organizing and the nature of work, business processes are generally classified into three different categories.
- Operational or primary processes: Those that are related to the core business and the company's value chain. Operational processes are responsible for generating and delivering value to the customer in the form of products or services. In addition, the main processes represent the key activities of the business to achieve its strategic objectives. Some examples are the order purchase and bank account management.
- Support or secondary processes: They support operational processes. A differentiator between secondary and primary processes is that support processes do not generate value to customers directly. Some examples are human resources and occupational health and safety.
- Management processes: They measure, monitor, and control activities related to procedures and systems. Like support processes, management processes do not directly create value for customers. Some examples are internal communication, strategic planning, business infrastructure (hardware), governance, and budgeting.
Business process management (BPM)
It is a systematic approach that allows an organization to perform its processes more efficiently and dynamically, meeting the changing needs of the business. The BPM facilitates management review and process control; the continuous improvement being the central focus of the BPM. Organizations use BPM software to monitor, control and improve business processes. Business process management includes certain steps such as process modeling, execution, monitoring, and optimization.
Business Process Monitoring.
BPM uses analytical studies to measure the performance of a process. It is used to identify elements such as cycle time, errors, and costs. Functional monitoring facilitates the functional performance of a process. Technical monitoring measures technical efficiency by monitoring and recording aspects such as response time and downtime.
Visibility of Business Processes
The visibility of business processes provides companies with a complete view of each of their processes, increasing operational response capacity and expediting decision making. It also helps determine if the processes are aligned with the business’s key objectives and goals and if a company's procedures are operating accurately.
Modeling or Mapping Processes.
It is a schematic representation of the flow of business activities, either of an organization or a particular function within a company. The main use of a process model is to document the current flow of activities (As Is) to identify improvements that reduce execution times (To Be). To make the process model, diagrams, charts, and other tools are used. A standard used and globally accepted is the Business Process Modeling Notation (BPMN).
Technological advances facilitate the automation of business processes, guaranteeing less time and lower execution costs. Process automation can be applied to simple and complex processes. However, we advise automating those processes where the following are required:
- Increase in efficiency.
- Reduction of human error.
- Defined roles and responsibilities.
It is a complete redesign of the process that seeks to generate a drastic impact. To do the process reengineering it is necessary to carry out an exhaustive analysis identifying the causes of the inefficiencies, eliminating the tasks that do not add value and even changing the design of the process to achieve a total transformation.
The 7 Steps to Defining a Business Process
1. Set goals
What is the purpose of the process? Why is it necessary? How do you verify that the process runs successfully?
2. Plan and map the process
What strategies do you need to achieve the goals? This is the roadmap for the process.
3. Set actions and assign responsibilities
Identify the tasks that your work teams and systems must perform.
4. Verify the process
Test your process on a small scale and verify its performance. Be aware of any problems that may occur and make the necessary adjustments.
5. Implement the process.
Start running the process in its normal state. Communicate and train all involved in advance.
6. Review the results
Review the process and analyze the patterns. Document the history of the process.
If the process is capable of achieving the established objectives, replicate the model in other processes in the future.